Failure to hold the director liable for the conclusion of the contract,

the impossibility of proper execution of which, according to the plaintiff, was obvious.

A member of LLC “Selvi” applied to court demanding to hold its General Director liable to the company in the amount of damages paid by the company to LLC “Interservice” for the improper execution of the contract. The improper performance of the contract was caused by interruptions in electricity supply caused by the actions of a third party (LLC “Astora”).

The two jurisdictions upheld the claims.

Position of the cassation:

▸ The court of the first instance in satisfying the claim indicated that the unreasonableness of the actions of the defendant was expressed in the fact that having the organizational and managerial function of the head of the company, he did not provide proper control over their execution, while holding the position of the sole executive body, both at the time of signing the above mentioned agreement and subsequently, the defendant had sufficient time to take measures for its implementation, but did not take sufficient measures for timely performance of obligations on delivery, being aware of the limitations of the supply.

▸Meanwhile, the courts established that the contract with LLC “Interservice” was concluded in order to settle the loan granted to LLC “Interservice” for the restoration of fixed assets of the company after the end of bankruptcy proceedings (the company’s products were supplied at a discount price), the defendant took measures to restore equipment to carry out basic production activities, bringing profit, these actions were taken in a short time after the termination of bankruptcy proceedings of the company. The penalty charged in favor of LLC Interservice was reduced from 0.1% to 0.05% at the request of the company. Contrary to the conclusions of the courts, in other cases it was found that the company took sufficient measures to restore the flow of electricity;

▸ At the same time in another case it was established that the breach of obligation was caused by the actions of LLC “Astora”, in connection with which the latter was charged with losses in favor of the company;

▸ The materials of the case do not prove that at the conclusion of the contract with LLC “Interservice” the defendant acted not in the interests of the company but in his own interests and his actions went beyond good faith and reasonable behavior. On the contrary, the circumstances established by the courts indicate that the defendant took measures to restore the production activities of the company, the implementation of the powers of the director within the limits of normal business (entrepreneurial) risk and taking the necessary and sufficient measures to achieve the objectives of the activities for which the legal entity was created.

To cancel the judicial acts, to deny the claims. Decision AS WSO from 01.12.22 in case № A45-30027/2021.